International investment is a popular choice for individuals, trusts, and companies alike. Following the pandemic, Dubai has seen an increase in Indian passport holders investing in the city’s real estate.
A Long-Term Trend
While the number of Indian investors in Dubai has grown following the pandemic, it is not new. Since 2017, India has been among the top three countries based on the number of investors in Dubai. To put this in perspective, Indians accounted for 16% of Dubai housing sales by volume in 2019. Experts say that the pandemic has only increased this trend.
In Q1 2020, year-over-year real estate transactions showed a 15% growth rate. The total sales value in that period also increased by more than 5%. According to experts, Indian investors played a significant role in that increase.
To put the extent of Indian investments in perspective, you can compare it to real estate investments from other nationalities. In the last five months, Chinese nationals invested 1.4 billion dirhams and UK nationals invested 2.9 billion; by contrast, Indians invested six billion.
Reasons for the Investments
One of the reasons Indians have invested in Dubai is that it is the quickest method of gaining residency in the United Arab Emirates. Because this is the reason for the purchases, most of the investments are from high-net-worth individuals (versus private equity funds, companies, and entities). As such, individual tax planning becomes more important than corporate taxes for these investors.
There are also plenty of reasons that Dubai attracts shareholders and fiduciary managers. The city already reached a 74% vaccination rate among the eligible population and hopes to have a 100% rate by the end of the year.
Dubai also has laws that encourage investment. Foreigners can own 100% of a local business, unlike past laws that required a local partner. For comparison, some other investment cities still require the latter.
The Golden Visa program for high-net-worth individuals who invest large amounts in Dubai is also very attractive. It is valid for five or 10 years. The minimum investment in a property is just 1 million dirhams; that is less than Spain or Portugal require, at 500,000 EUR each.
On top of all those factors, rental yields are usually between six and 10 percent. This is incredibly attractive to individuals and directors of investment funds. The same amount of money also buys more real estate than in Monaco, Singapore, London, Shanghai, or Mumbai.
Investors and company management also appreciate the numerous regulations that protect investors by holding developers accountable.
Of course, the fact that traveling between Mumbai and Dubai only takes 3.5 hours in an airplane is also a positive for many investors.
Where They Buy
The Indians who buy homes in Dubai mainly focus on luxury and a grand lifestyle. As such, they tend to buy properties in Downtown, Marina, and Palm Jumeirah. Specific locations include Dubai Hills Estate, Meydan, Jumeirah Lake Towers, and Jumeirah Village Circle.
The investors do not typically care about a budget, provided they can trust that the property meets their needs. Experts also say that these properties have “satisfactory” entry prices and good returns on investment.
The Types of Properties
There is some variety in the types of properties that Indians choose to buy as a foundation asset. Experts say that newly married couples typically opt for apartments. Bigger families typically opt for villas.
Real estate experts in Dubai have also noticed a trend towards larger properties since the pandemic. They connect this to the shift to remote work and school.
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